Stockholm Bromma Airport at risk of early closure

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Based on the results of an impact assessment Swedish airport operator, Swedavia, is recommending the early closure of Bromma Stockholm Airport.

The airport’s current lease with the City of Stockholm is due to expire in 2038. However, Jonas Abrahamsson, Swedavia’s President and CEO said that ahead of that date, “Bromma will most likely have excess capacity due to low traffic volume for a long time going forward. In the long term, the cost of this will be borne by passengers and already wounded airlines, which we do not believe is possible.”

Ake Svensson, Chairman of Swedavia’s Board of Directors added: “In Swedavia’s view, given the new market situation, the continuation of operations at Bromma is no longer justified on commercial grounds and a consolidation of air traffic in the Stockholm region at Stockolm Arlanda Airport is possible. However, it is essential that Arlanda has the long-term conditions to develop in line with the needs of society.”

In the shorter term, Swedavia believes that should Bromma close early commercial air traffic can be handled at Arlanda. It also believes that with further investments in infrastructure needed at and around Arlanda, the airport needs to be able to continue to serve as a catalyst for the aviation industry’s ongoing transformation in response to climate change.

While focusing Stockholm’s air capacity at Arlanda could mean that, for some areas of Sweden, air links to Stockholm would deteriorate, at the same time some areas would benefit from better national and international connectivity by consolidating domestic and international traffic at one airport.

Svensson also advised however that while Swedavia reached its conclusion based on the commercial conditions of the company, a political decision to close Bromma ahead of time should be made taking a broader social perspective into consideration.

 

 

Ryanair expands route network from Göteborg Landvetter

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The Irish low-cost carrier Ryanair is investing further at Göteborg Landvetter Airport with a new direct route to Banja Luka, the second largest city in Bosnia and Herzegovina.

Ryanair will be the only airline to serve this route, which will start on 25 October and will be operated twice weekly with a Boeing 737-800. It is expected to be a popular new route as Western Sweden has a large share of residents with roots in the Balkan region and Bosnia in particular.

“We’re delighted that Ryanair has chosen to expand it operations at Göteborg Landvetter with a new direct route to Bosnia and Herzegovina, and under this challenging time we are pleased that Ryanair sees new opportunities in this market,” said Elizabeth Axtelius, Director Aviation Business at Swedavia.

Although Axtelius conceded that far fewer flights compared to before the pandemic can be expected for a while going forward, she also noted that she is cautiously looking forward to seeing more air traffic and passenger return to Swedavia’s airports in due course. “Health and safety is our top priority. In addition to the Public Health Agency of Sweden’s recommendations, we comply with international regulations and have introduced requirements for face coverings and other extensive infection control measures to create a safe environment both for passengers and employees at all of our airports.”

Swedavia continues to report significant YoY decrease in passenger traffic

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Swedavia has reported a decrease of 83% in passenger traffic in August compared with the same month last year. Just 650,000 passengers flew via the 10 airports in Swedavia’s portfolio last month compared to 3,700,000 in August 2019.

Of the 650,000 passengers in August, 420,000 were international passengers, a decrease of 85% compared to the same month least year. Domestic travel decreased to a lesser extent, falling 76% in August. A total of 230,000 passengers flew domestically compared to 980,000 last year during the same month.

“Summing up the summer months the cautious recover in air travel continued in August as countries eased travel restrictions enabling greater connectivity between countries,” said Jonas Abrahamsson, Swedavia’s President and CEO. “Although air travel continued to recover in August volumes remain at historically low levels due to the effects of the coronavirus pandemic,” he continued.

Across Swedavia’s regional hubs passenger volume decreased between 66% and 93% compared to figures for the same month last year.

Decline in passenger traffic sees Swedavia push ahead with redundancies

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Looking back at the first half of 2020 Swedavia, has noted that the impact of COVID-19 was particularly dramatic during the second quarter of this year when 321,000 passengers (compared to 10.7 million in 2019) flew to or from the Swedish operator’s airports. A decrease of 97%.

To replace the company’s decrease in net revenue (which amounted to around 1.3 billion Swedish kronor), Swedavia’s owner – the Swedish state – provided a capital injection of 3.15 billion kronor. During the last few weeks of the quarter, the aviation market showed signs that a recovery had begun with the market moving towards a new normal with new conditions following the pandemic.

“Swedavia entered the crisis in a very good financial position,” said Jonas Abrahamsson, Swedavia’s President and CEO. “However, our operations are entirely dependent on variable revenue from our customers, and the crisis entailed lost revenue for Swedavia of almost 500 million kronor a month during the quarter. The 3.15 billion kronor capital injection has been vital to the company’s ability to create long-term value and to safeguard critical Swedish infrastructure.”

Swedavia has taken proactive measures to counter the decline in air travel, and it is expected that these measures will cut the company’s costs by about one billion kronor and reduce investments by the same amount in 2020. “In the short term, Swedavia’s view is that the aviation market in both 2020 and 2021 will be strongly affected, which will have consequences both for access and for the companies that operate in this market,” said Abrahamsson. He added that short-term cost savings need to be implemented with further efficiency improvements and long-term sustainable measures.

He concluded that, “Unfortunately, among other moves, it means that we need to carry out a major part of the redundancies of 800 full-time positions that we announced in March, during the second half of the year. This is a difficult but necessary decision that no one could have imagined we  would need to make when we started the year. The changed market situation also means that we are now giving priority in our investment portfolio to projects and measures that increase efficiency, flexibility and service rather than to capacity.”

Swedavia partners with Veovo to implement Revenue Management System

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Veovo has won the tender to provide all ten airports in Swedavia’s portfolio with its automated Revenue Management System.

The deal will assist in automating and centralising the billing of its key aeronautical revenue streams. With aeronautical revenues the primary source of income for an airport, the charges can be complex based on a range of factors, such as aircraft movement, weight and passenger numbers. In addition the number of systems in use across an airport can frequently result in data inaccuracies and billing delays. For a multi-airport operator like Swedavia, these complexities are even more pronounced.

Veovo’s Revenue Mangement system will ensure a more efficient invoicing process for Swedavia and will also provide a platform to fuel sustainable growth. By fully automating the collation, preparation and processing of billing data in real-time, the system will reduce revenue leakage, minimise billing errors and improve the cash cycle time. It will also provide greater visibility into vital income-generating streams across all Swedavia’s operations.

“We are delighted that, even at this time of industry upheaval, Swedavia has decided to commit to a long-term partnership with Veovo,” said James Willimaons, Veovo CEO. “Swedavia joins over 70 airports around the world, who are successfully using Veovo Revenue Management to underpin their growth strategies.”